Silver price prediction: XAG/USD rebounds 2.6% ahead of dovish Fed policy

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29.10.2025

Silver price prediction: XAG/USD rebounds 2.6% ahead of dovish Fed policy — Silver rally gains momentum

Silver [XAG/USD] rebounded sharply on Wednesday, reversing part of its recent eight-day decline that saw prices drop by 16% from the all-time high of $54.42 to a five-week low at $45.57. The recovery started on Tuesday when the metal found strong technical support near the 50-day EMA, forming a bullish doji candlestick pattern that signalled a potential reversal from the extended downtrend.

- Silver jumps 2.6% to $48.12, reversing part of its eight-day decline.

- Bullish doji pattern and RSI rebound confirm momentum shift toward renewed buying interest.

- Traders anticipate dovish Fed tone could lift silver beyond $50 psychological resistance zone.

The doji candle, a well-recognized single-bar reversal signal, appeared after a sustained period of selling pressure, showing that bearish momentum was losing strength. Its structure — a small real body positioned near the top of the range and a long lower shadow — indicates that buyers have begun to absorb supply after the prolonged retracement. Historically, this pattern often marks the early stages of a shift in market sentiment.

Silver price dynamics (Sept - Oct 2025). Source: Tradingview

Today, October 29, silver extended Tuesday’s recovery during the European session, rising to $48.12 and posting a 2.6% gain. The rally confirms the validity of Tuesday’s technical signal, suggesting that buying pressure has strengthened ahead of the U.S. Federal Reserve’s policy announcement later in the day. This rebound represents the first strong upside reaction after more than a week of consistent losses, hinting that traders may be positioning ahead of a potential dovish outcome from the central bank.

Silver macro optimism aligns with technical support

From a macro perspective, the FOMC meeting later today dominates sentiment across financial markets. Investors expect another rate cut, following the 25-basis-point reduction announced last month. The policy statement will outline the committee’s latest economic outlook and provide clues about future rate decisions. Despite attempts by the U.S. dollar to stabilize in today’s trading session, silver’s price action reflects anticipation that lower interest rates could support non-yielding assets such as precious metals.

Momentum indicators support this recovery narrative. Both the daily and four-hour RSI readings have moved above 50, signalling renewed strength in bullish momentum. The price rebound from the 50-day EMA adds further credibility to the notion that sellers have been exhausted.

If the Fed confirms a softer stance on monetary policy, silver could extend its gains further into the $50 region later today. The alignment of technical recovery and fundamental expectations suggests the metal is regaining strength as traders prepare for another potential leg higher in the ongoing precious metals cycle.

We discussed silver dropping over 2% today, marking its second consecutive weekly decline since August. RSI turned bearish for the first time since August, confirming sellers held short-term control.

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